From the Nolo Business & Human Resources Center
State Start-Up Requirements
Yet another governmental level to deal with.
You can bet that the state where you’re starting your business will have
bureaucratic hoops for you to jump through. These may range from filing
organizational papers and getting a license for your occupation to tax
registration and environmental compliance.
Regulated Occupations and Products
You probably know that states give licenses to people practicing the
traditional professions, such as lawyers, doctors, accountants, teachers,
architects, and engineers. States also license people in a broad range of
trades, from auto mechanics and barbers to real estate agents and tax preparers.
Sometimes licenses are issued to the business, while other licenses are taken
out by the individual. You can’t guess which occupation needs a license, so
you’ll just have to ask. Your state website or trade association is a good place
to start.
The licensing procedures will vary, but you’ll probably have to show evidence
of training in the field, and you may have to pass a written exam. Sometimes you
have to practice your trade or profession under the supervision of a more
experienced person for a while before you become fully licensed. Some licenses
are good for a limited period before there is retesting. Others require proof of
continuing education in the field.
The state may also want you to get a license if you make or sell certain
products, such as liquor, food, lottery tickets, gasoline, or firearms.
Tax Registration
If you’re engaging in retail sales, you probably need to register for or get
a sales tax license or seller’s permit. This lets you collect sales taxes from
your customers, which you'll pay to the state. You need this permit even if
you’re also selling goods that are exempt from your state’s sales tax. When the
time comes, you’ll owe tax only on the taxable sales. If your business both
sells products and performs services, it will be important to keep your labor
sales separate from sales of goods, since sales of services aren’t usually taxed
(only in some states).
 Five
states do not impose general sales taxes. In Alaska, Delaware, Montana,
New Hampshire, and Oregon, you may not be required to get a state sales permit.
However, cities and counties in those states may issue sellers' permits and
charge sales taxes. Further, some transactions may be subject to something
similar to a sales tax, although it has a different name. Your state tax agency
can tell you the specifics.
You’ll probably have to register with your state’s treasury department or
department of revenue, except in the few states that still assess no taxes on
income. You may also have to register for other business taxes.
Business Entity Filings
If you’ve chosen to start out your business as a corporation , limited
liability company (LLC), or limited partnership, you’ll need to file
organizational documents with your state’s Secretary of State, Department of
Corporations, or similar office. Most states have sample or form documents
online.
|
